Retail investors invested in ShenzhenJingQuanHua Electronics Co.,Ltd. (SZSE:002885) copped the brunt of last week's CN¥336m market cap decline

Key Insights

• ShenzhenJingQuanHua ElectronicsLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 16 investors have a majority stake in the company with 50% ownership
• Insider ownership in ShenzhenJingQuanHua ElectronicsLtd is 23%

A look at the shareholders of ShenzhenJingQuanHua Electronics Co.,Ltd. (SZSE:002885) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 23% came under pressure after market cap dropped to CN¥3.0b last week,retail investors took the most losses.

Let's delve deeper into each type of owner of ShenzhenJingQuanHua ElectronicsLtd, beginning with the chart below.

View our latest analysis for ShenzhenJingQuanHua ElectronicsLtd

What Does The Institutional Ownership Tell Us About ShenzhenJingQuanHua ElectronicsLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

ShenzhenJingQuanHua ElectronicsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see ShenzhenJingQuanHua ElectronicsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in ShenzhenJingQuanHua ElectronicsLtd. Our data shows that Yancheng High-Tech Zone Investment Group Co., Ltd. is the largest shareholder with 14% of shares outstanding. Xiao Yue Dou is the second largest shareholder owning 11% of common stock, and Lipin Zhang holds about 3.0% of the company stock. Lipin Zhang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of ShenzhenJingQuanHua ElectronicsLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of ShenzhenJingQuanHua Electronics Co.,Ltd.. Insiders have a CN¥673m stake in this CN¥3.0b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over ShenzhenJingQuanHua ElectronicsLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 14%, of the ShenzhenJingQuanHua ElectronicsLtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.